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Jan 24 • 5 tweets • 2 min read
European natural gas prices surged by more than 10% today on escalating Russia-Ukraine tension 🇷🇺 📈

Goldman says Russian flows to Europe could be curtailed for “an indefinite period” if the Nord Stream 2 pipeline project to Germany is hit by sanctions

bloomberg.com/news/articles/… Image
German power prices for Tuesday jumped to their highest in more than a month as output from thousands of wind turbines across Europe’s biggest market plunged 🇩🇪 💨

Less wind output forces utilities to burn to more gas

bloomberg.com/news/articles/…
💰 📈
Dutch natural gas futures surge as much as 20% today

Prices are back in the 90 euros/MWh range Image
Gazprom says European/Ukraine natural gas reserves hit all-time lows 🇪🇺

Then Gazprom changes the subject and says Russian pipeline gas flows to China hit a record high 🇨🇳

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More from @SStapczynski

Stephen Stapczynski Profile picture
Jan 25
The US is prepared to ensure alternative natural gas supplies to Europe covering a potential shortfall from Russia, Biden administration officials said
🇺🇸🤝🇪🇺

🚢 Re-routing supplies could take several days/weeks
🇶🇦 Qatar wouldn’t be able to boost output

bloomberg.com/news/articles/…
To be sure, most US LNG supplies are sold to utilities/portfolio players under long-term contracts. They need to have financial incentive to send more to Europe

In fact, some LNG shipments are already diverting away from Europe and going to Asia due to better profit potential Image
In other words, US LNG tends to go to whoever will pay the most 💰

Remember, the US government has no direct control over American LNG exports or where gas goes. They can negotiate with export projects, but most of their LNG is under contract to non-US firms (like Jera or Gail)
Read 5 tweets
Stephen Stapczynski Profile picture
Jan 19
China is trying to sell a lot of LNG into the spot market, indicating the world's top importer is well-stocked 🇨🇳

Sinopec issued a sales tender offering up to 45 cargoes for 2022 delivery (They usually buy)

The surprise move may spur bearish sentiment

bloomberg.com/news/articles/…
So why is China doing this now? A few ideas:

> Sinopec has a long-term purchase agreement for 2 million tons of LNG a year from Qatar that started this year, which may give them excess supply

> Covid measures seen having a larger impact on demand

> Testing price levels
This is the first time Sinopec -- traditionally a buyer -- has issued such a large sales tender offering to resell LNG cargoes

To be sure, it isn’t clear how many cargoes Sinopec actually plans to sell via its tender, and the firm may decide not to award any shipments at all
Read 5 tweets
Stephen Stapczynski Profile picture
Jan 18
Crude oil surges to highest since 2014 📈🛢️
#OOTT

Brent oil has rallied with the market tightening on robust demand and outages at producers like Libya

Prices extended gains after Houthi fighters launched drone strikes on UAE (3rd biggest OPEC producer)

bloomberg.com/news/articles/…
Brent oil extends gains to ~$87.40/bbl the highest intraday level since October 2014

Goldman Sachs said prices are headed for $100 by the third quarter 💰

bloomberg.com/news/articles/…
Oil traders are paying higher and higher premiums for cargoes in Asia, as fears fade over the demand impact from omicron

OPEC said in its monthly report that it expects global oil markets to remain “well-supported” this year by robust demand

bloomberg.com/news/articles/…
Read 6 tweets
Stephen Stapczynski Profile picture
Jan 16
New England is getting about 25% (!) of its electricity from oil power plants this morning due to frigid weather and natural gas supply restraints 🇺🇸🥶

While uncommon, it does tend to happen during cold snaps. Last time it was this severe was winter 2018

bloomberg.com/news/articles/…
It is wicked cold in Boston

boston.com/news/local-new…
There isn't enough pipeline capacity to New England to significantly boost natural gas supplies when colder weather hits

New gas-pipeline projects for New England and other regions have been scrapped amid fierce opposition from environmental groups

bloomberg.com/news/articles/…
Read 4 tweets
Stephen Stapczynski Profile picture
Jan 4
The US was the world’s biggest exporter of liquefied natural gas last month for the first time ever
🇺🇸🦅🥧🚢

American output edged slightly above Qatar in December due largely to a jump in exports from Sabine Pass and Freeport, according to ship data

bloomberg.com/news/articles/…
The first American LNG cargo produced from shale gas was shipped in 2016, and the nation is expected to have the world’s largest export capacity by the end of 2022 after new units start up, according to @EIAgov

eia.gov/todayinenergy/…
The shale gas revolution, coupled with billions of dollars of investments in liquefaction facilities, transformed the US from a net LNG importer to a top exporter in less than a decade

US gas production has surged ~70% from 2010 as the nation unlocked shale reserves
Read 6 tweets
Stephen Stapczynski Profile picture
Jan 3
Natural gas prices in Europe fell for a ninth straight day in the longest streak of losses in seven years (!) due in part to a jump in LNG deliveries📉📉

Global LNG exports surged to a record last month as projects boosted output, according to ship data

bloomberg.com/news/articles/… Image
This is also another important factor 👇

Milder-than-normal winter weather is curbing demand for the heating fuel, allowing inventories to be refilled in Europe

Nevermind, European natural gas futures erased today’s losses and are now up 11%

(Volatility. Expect a whole lot of volatility this winter) Image
Read 5 tweets

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